What’s CSR Got To Do With IT?

Karen Ferris

Director

Macanta Consulting

What’s CSR Got To Do With IT?

Outline

✶ What is CSR? ✶ Who does it concern? ✶ Why is it high on the CEO agenda? ✶ The benefits of CSR ✶ Management of sustainability today ✶ Pressure on the CIO ✶ What’s ITSM got to do with it? ✶ Conclusion and questions

What is CSR?

CSR is about how businesses align their values and behaviour with the expectations and needs of stakeholders – not just customers and investors, but also employees, suppliers, communities, regulators, special interest groups and society as a whole. CSR describes a company's commitment to be accountable to its stakeholders.

www.csrnetwork.com

Who Does It Concern?

I.T. Improve energy

efficiency, reduce carbon footprint,

manage recyclables and

waste in the supply chain

Socioeconomic well-being of the regions in which they operate and the people they

employ

Reputation for CSR is becoming an important tool in attracting and retaining talent

Why is it High on the CEO Agenda?

93% of CEOs believe that sustainability issues will be critical to the future success of their business.

72% of CEOs cite “brand, trust and reputation” as one of the top three factors driving them to take action on sustainability issues. Revenue growth and cost reduction is second with 44%.

Accenture 2010

What’s CSR Got To Do With IT?

TOP TEN DRIVERS FOR CSR

1. Company culture / values 2. Reputation 3. Brand image 4. Attracting and retaining employees 5. Profitability

Green Capital and CSR Sydney

What’s CSR Got To Do With IT?

TOP TEN DRIVERS FOR CSR

6. Securing long term viability in the market place 7. Competitive advantage 8. Improving energy efficiency 9. Risk management 10. Customer demand

Green Capital and CSR Sydney

Benefits of CSR 1.  Improved brand image 2.  Risk reduction 3.  Attracting good staff 4.  Long term viability in the market place 5.  Product / market innovation 6.  Higher staff retention 7.  Improved bottom line 8.  Cost savings 9.  Increased productivity 10.  Reduced cost of supply chain management 11.  Share price increase

Green Capital and CSR Sydney

Companies where sustainability is a top ten item in their CEO’s agendas are twice as likely as others to integrate sustainability into their companies’ business practices. This suggests that senior executives who want to reap the benefits of incorporating sustainability into their companies overall strategies must take an active role in the effort.

McKinsey & Company 2010

They (CIO and IT) will be called upon to gather, analyse and communicate massive amounts of data – some of which is not currently being collected – and ensure their accuracy, reliability and relevance. Companies need to collect and share information across a wide array of channels and with multiple constituents to ensure that customer – and partner – needs are met, not to mention the needs of the NGOs, governments and community organisations

IBM 2008

The Pressure Is On!

CUSTOMERS EMPLOYEES

SUPPLIERS

INVESTORS

PARTNERS CIO

The Pressure Is On!

CUSTOMERS EMPLOYEES

SUPPLIERS

INVESTORS

PARTNERS CIO

Environmental and social policies International trade practices

Product health and safety records Procurement and sourcing policies Product composition and lifecycle

management Community activities

Treatment of employees

The Pressure Is On!

CUSTOMERS EMPLOYEES

SUPPLIERS

INVESTORS

PARTNERS CIO

Organisation in-line with personal values Meeting CSR obligations

The Pressure Is On!

CUSTOMERS EMPLOYEES

SUPPLIERS

INVESTORS

PARTNERS CIO

Values in line CO2 emissions Product impact

The Pressure Is On!

CUSTOMERS EMPLOYEES

SUPPLIERS

INVESTORS

PARTNERS CIO

CSR factors driving investment decisions

The CIO Agenda

Integration and Alignment •  Take inventory to align IT practices with that of the

company’s CSR mission statement Macavinta 2010

•  The higher the level of integration, the increased ability of the organisation to realise the benefits

•  Organisations with a higher level of integration of CSR said they experienced financial benefits such as high profitability, cost savings and share price increase

•  Level of negative impacts or risk reduced when level of integration increased Green Capital & CSR Sydney 2008

CSR Value Curve

Legal and compliance

Strategic philanthropy

Values-based self regulation

Efficiency

Growth platform

Adherence to law in the countries of production, operation and distribution

Alignment of charitable activities with social issues that support business objectives

Incorporates the company’s value system and/or code of conduct to guide behaviour

Measureable cost savings through efficient or win-win scenarios

Access to new markets, new partnerships or product/service innovations that generate revenue

Source: IBM Institute for Business Value (2008)

Transparency

Source: IBM Institute for Business Value 2008

Information Explosion

Carbon Information Officer

•  Accuracy, reliability and relevance •  Communicating compliance with regulations will require

quantifying, analysing and reporting including: •  Carbon and environmental impacts •  The conduct of a vast number of suppliers •  Sourcing and content of each product and

component

CIO

Green Wash

Employees CIOs will be instrumental in creating an environment for company wide engagement and collaboration. IBM

Millenials expect to be convinced that employers genuinely care about a greater good beyond financial profit – and to do that from inside the business. Jordon Walker

Green IT In Australia ICT contributes 2.7% of CO2 emissions (ACS 2010)

Comatose equipment can account for as much as 15-30% of the total IT equipment in many data centres (Brill & Stanley, 2009)

Server utilisation can be as low as 2-4% (Kadam, 2010)

What’s ITSM Got To Do With It?

Alignment & Integration

Transparency

Employees

Green IT

Alignment and Integration

CSR

Alignment and Integration

Define

Charter

Analyse

Approve

Service Strategy

•  Inventories •  Business Case

•  Value Proposition •  Prioritisation

•  Service Portfolio •  Authorisation

•  Communication •  Resource allocation

Mission imperatives Compliance Trends Intangible benefits Strategic or business fit Social responsibilities Innovation

Outcomes for existing services: Retain Replace Rationalise Refactor Renew Retire

No Greenwash!

Transparency

"Consumers are asking who is behind the brand, so we have to make it visible." Paul Bulcke, Nestlé S.A. 2010

Employees

"Environmental, social and governance issues are crucial to our employee value proposition." Luiz Ernesto Gemignani, Promon S.A. 2010

Green IT

Sun Microsystems •  4 locations – 3 months •  6199 comatosed devices •  430 pallets •  4100+ servers •  64% powered on and running 24x7

Conclusion ✶  Use Service Management (and ITIL) to:

•  Align IT CSR with that of the business •  Embed CSR into the fabric of IT •  Provide transparency of information •  Drive employee engagement •  Reduce the impact on the environment

✶  The results: •  Improved reputation and brand image •  Reduced risk •  Increased productivity & profitability •  Attraction and retention of good staff •  Long term viability in the market place

What’s CSR Got To Do With IT?